Q Let me ask you first, the President commemorated the three months since the terrorist attacks. And in the ceremonies, the President said, we will never forget what we have lost and what we have found. Aside from the loss of so many precious lives, what did we lose in this terrible tragedy, and what did we find?

THE VICE PRESIDENT: Well, I think in terms of loss, one of the things that comes to mind is the sense of invulnerability that we've enjoyed now for a couple of centuries as a country. We were behind two oceans, and therefore, relatively immune to attack; concerned, obviously, during the Cold War about the possibility of global war, but we managed all that. I think that's a significant change.

I guess in terms of what we've sort of reaffirmed or found, I think of it in terms of our sense of national unity, our commitment to defeat terrorism on a global basis, the determination with which the countries responded to the task at hand.

Q Do you think that that determination will hold? There is always a worry that as we make gains and perhaps as we finish off what is happening in Afghanistan, that people will lose interest.

THE VICE PRESIDENT: Well, I think it will hold. I've been pleasantly surprised, so far, at how well it has held. Of course, if there is another terrorist attack, that will, I think, without question, reaffirm some of the judgments that were made in the immediate aftermath of September 11th 

Q To your knowledge -- I'm sorry -- to your knowledge, have we foiled any terrorist attack since September 11th?

THE VICE PRESIDENT: I believe we have. It would be hard to put your finger on any one specific thing, but there has been speculation, for example, that there was a fifth terrorist team, other kinds of activities planned various places around the world, and that's been disrupted, or those activities have been disrupted as a result of our cooperation with other law enforcement agencies.

Our work with joint intelligence operations, I think, putting the heat on the al Qaeda and on bin Laden in Afghanistan as we have, has made it very difficult for them to be able to plan for their operations, because of the intense military pressure they're under.

That doesn't mean there won't be more, but I think we've clearly disrupted their whole network.

Q In Afghanistan, are we now witnessing the last stand of Osama bin Laden?

THE VICE PRESIDENT: I hope so. I think the results to date have been very, very good. And the Taliban clearly is finished as a military organization. A lot of the al Qaeda has been hard-hit, especially in recent days with our attacks up in the Tora Bora section. Whether or not he escapes and lives to fight another day I think is still an open question. Hopefully, we'll get him wrapped up in Afghanistan. But wherever he goes, we'll get him eventually.

Q You've seen the videotape, the most recent videotape of bin Laden. He not only displays what I'm told is advance knowledge of the terrorist attacks, but also seems to be gloating over the number of deaths.

THE VICE PRESIDENT: The -- of course, I don't speak Arabic, so I'm relying upon what someone told me he was saying. I did see the tape. The impact of it is that the -- a certain amount of cynicism, as well, too. I mean, he talks about young men who were part of the hijacking crew who did not know they were going to die, that they may well not have all been as committed to suicide as were the pilots.

So there is a degree of, I guess, evil that comes through when you think about what he's saying and sort of the juxtaposition of that with his disappearance.

Q But he's clearly smiling, and --

THE VICE PRESIDENT: Yes. Smiling and very much engaged with another individual talking about when these events occurred and how he was notified and how he was surprised, for example, at the extent of destruction. He did not think the Trade Center would collapse.

Q How close are we to accomplishing what we've set out to do in Afghanistan?

THE VICE PRESIDENT: We're close in the sense that we've clearly taken the Taliban out of power; they're history. We've not yet wrapped up Mullah Omar, but I expect we'll do that shortly. We've had a significant impact on the al Qaeda network and disrupting that whole operation, and they had a base in Afghanistan that's now been pretty well destroyed.

The one remaining major piece of business there, of course, is to get Osama bin Laden as well, too. But I think that will happen. But the ability of the al Qaeda to use Afghanistan as a base to launch attacks against our embassies, against our naval vessels, against now the United States directly, has been pretty well destroyed. Afghanistan, I don't think, will again serve that purpose. That doesn't mean that they can't strike with other cells that are already out there in this worldwide network they've created. It doesn't mean they can reestablish themselves someplace else.

But I think it would be very unlikely that any other government or country would want to receive Osama bin Laden, given what happened to the Taliban.

Q Well, where does the war against terrorism go after Afghanistan? What's the next step?

THE VICE PRESIDENT: We've got the network, if you will, al Qaeda network, that clearly exists around the world. The estimates of how many people went through the training camps in Afghanistan runs as high as 70,000; that's the high side estimate.

There are cells in 50 or 60 countries around the world, many of them good friends of the United States. They're clearly there oftentimes surreptitiously, but we've uncovered al Qaeda operatives during the course of this investigation; for example, in Germany, in Hamburg; Spain, a lot of other places around the world, too.

We've got to go wrap all those up. We've got to deny them the ability to operate. We also need to drive their financial resources, which we're doing. But also, we need to work on the nongovernmental organizations and the charitable foundations that they've often used in the past to provide cover, logistics support, financing for their activities.

Q Now, there is talk of going after al Qaeda cells in the remote, more lawless areas of Somalia, the Philippines, Indonesia. Do you envision U.S. troops working around the world to track down and bring to justice al Qaeda terrorists who have found their way to some other country?

THE VICE PRESIDENT: It's possible, Jim. But you've got to remember the President's decision, really -- it was the very first night of the crisis back on September 11th -- was that this was going to be a multi-faceted affair. Some military, but it's also law enforcement, it's intelligence, it's financial and diplomatic, and I think in many cases we'll find that those cells can be wrapped up with the cooperation of the government where they're located.

A lot of those are close friends of the United States, and they're eager to work with us in doing that.

There may be a few cases where military force is the only option, or where military force is required for one reason or another to wrap up these cells. And when that's the case, the President, I'm sure, will do whatever is necessary to achieve that objective.

Q There have been several reports that Somalia is one of those places; that it's lawless, that there are places where al Qaeda can hide that are beyond any government, and where it might be necessary for us to act.

THE VICE PRESIDENT: There's speculation about a lot of places. I don't want to be specific about any one particular one; that would be sort of forecasting, if you will, operational details and I don't want to do that.

Somalia is clearly one of those places where there is no central government that controls all the real estate, and where the possibility exists that an organization could operate with impunity and not be subjected to local law enforcement, and therefore represent a threat to its neighbors, or the United States.

Q What have we learned about the so-called "Arab or Muslim street," from this encounter in Afghanistan? There was a lot of talk beforehand about what would happen if the U.S. went to war against Muslims, even though it had Muslims on its side? What have we learned about that factor in the Muslim world?

THE VICE PRESIDENT: I think we've been successful in conveying a couple of things. I think we've worked hard to make it clear that this is not a war against Islam. We're not out to persecute Muslims by any means. We are out to wrap up terrorist networks. And there's a major distinction to be made there, and I think we've successfully made that distinction.

I think it's also fair to say that they respect success. And they've seen President Bush's determination. They have seen his leadership, the way he's pulled together the world, the international community, and seen what happened to the Taliban. And that's left, I think, no doubt in anybody's mind that we're deadly serious, that we mean business, and that we'll do whatever is required to eliminate this scourge.

Q No doubt that they can be the next target if they're not cooperating in the war against terrorism?

THE VICE PRESIDENT: Well, it's not so much that, that they could be the next target, but that we are justified in what we're doing, that the attack on 9/11 was deadly serious, that it wasn't an attack just against the United States, but some 80 countries lost people -- many Muslims died in the World Trade Center in New York -- and that we're prepared to exercise the kind of leadership and use whatever capability is required in order to end the threat to the United States and to other nations around the world.

Many of these other countries, too, where we talk about the Arab street, for example, have been targets, themselves, of terrorism. A lot of -- for example, Egyptians have been involved in the al Qaeda network. Part of that goes back to 1981 when Anwar Sadat was assassinated by the Muslim brotherhood, Islamic Jihad.

So there are a lot of victims of terror around the world who I think welcome the leadership the U.S. has provided, especially in the Arab world.

Q The President is talking about the dangers of proliferation of weapons of mass destruction. What is the administration's chief concern at this moment on that front?

THE VICE PRESIDENT: It used to be if you worried about nuclear weapons, or biological or chemical weapons, you worried about the capabilities of a state, of another government. And you could deal with that by deterring them from using those weapons, by holding things they valued at risk: international agreements, inspection regimes and so forth.

What's new and different now after 9/11, in addition to our recognized vulnerability, but is the emerging link, if you will, between the terrorists on the one hand and weapons of mass destruction on the other. A nuclear weapon in the hand of a terrorist is a very different proposition than a nuclear weapon in the hand of a state. Now, you can't deter a terrorist. What are you going to hold at risk? What does he care about defending? Arms control agreements? Meaningless to a terrorist. Summitry? Diplomacy? How do you deal with a terrorist with a nuclear weapon, who is prepared to not only slaughter Americans, but to die himself in the act?

That's new. And what that requires is for us to address the terrorism problem, but it means terrorism now, in a much broader sense than before, in the sense that we're not talking just about hijacking airliners or holding hostages or conventional explosives, we're talking about the possibility that at some point, one of these organizations, maybe al Qaeda or others, could be successful in their efforts to acquire nuclear weapons or biological or chemical weapons and use them against the United States.

Q Now, one of the fears for many years has been that Saddam Hussein in Iraq, who is developing weapons of mass destruction, when the President answered a couple of questions recently about Iraq, his remarks were widely interpreted as a sign that the administration is looking at Iraq as the next target in the war on terrorism.

Has that decision been made?

THE VICE PRESIDENT: I would say that we're looking at all areas of the world that could conceivably threaten the United States or our friends. And Iraq is of concern, because of Saddam Hussein's track record, because he has tried aggressively to develop weapons of mass destruction. He was well on his way to developing nuclear weapons in 1981 when the Israelis destroyed the Osirik reactor. He was well on his way again 10 years later in 1991, when we invaded and took out much of his WMD capability; and he's trying again now.

He's kicked the inspectors out three years ago, so he's had plenty of time, using his oil revenues, the part of it that comes around the Food for Peace program, or Oil for Food program, using that to acquire new capabilities, deadly capabilities. So he is clearly a threat to his neighbors. He's used them. There is almost no one in the world who has used these weapons in recent years except Saddam Hussein. He's used chemical agents against both the Iranians as well as his own people, the Kurds in the north.

Q So would you say it is -- if he doesn't change his ways, that it is inevitable that Iraq will become a target in this war, if -- even if it's not imminent?

THE VICE PRESIDENT: I never say anything is inevitable, Jim. But if I were Saddam Hussein, I would be thinking very carefully about the future, and I would be looking very closely to see what happened to the Taliban in Afghanistan.

Q Now, the Iraqi National Congress, the opposition to Saddam, has been getting some money from the United States; that money runs out at the end of December. And in the past, we have not allowed them to spend that money on military training or for operations inside Iraq. Will they get more money? Can -- will those prohibitions be lifted?

THE VICE PRESIDENT: The policy towards Iraq clearly is going to evolve over time. But they remain very much an area of concern for us because of the threat that Saddam Hussein has represented in the past and does in the future.

In the course of addressing that threat, we'll want to work with our friends and allies in the region. We'll want to work, I think, with the Iraqi opposition, with the Iraqi National Congress. I personally met with Mr. Chalabi myself in years past, and I would expect that they will be a part of a continuing effort as we think about how best to deal with that threat.

Q But a little premature to talk about military operations inside Iran?

THE VICE PRESIDENT: I don't like to predict what we will or won't do. And my old friend, Don Rumsfeld, would be all over my case were I to forecast military operations. (Laughter.)

Q Now, the administration recently took action for the first time against a terrorist group that was not associated with the attacks on September 11th -- Hamas --

THE VICE PRESIDENT: Right.

Q -- in the West Bank. And you used the same definition about them: A terrorist group of global reach. Are we broadening the war on terrorism now beyond those who are responsible for the attack on us in September?

THE VICE PRESIDENT: The President has talked consistently since 9/11, although the focal point, obviously, was al Qaeda and Osama bin Laden, those responsible for the 9/11 attack. This is a broad problem that affects a lot of nations around the globe, and it's not limited to just one organization.

The al Qaeda network now, of course, is heavily infused with Egyptians, Islamic Jihad; Egyptian Islamic Jihad has merged with his operation. The Uzbeks have been faced with a terrorist threat that again was part of the operation, the leader of the Uzbek, or one of the leaders of the Uzbek movement may have been killed in Afghanistan.

Now, the situation with respect to Hamas, of course, and what we did there was to move against an organization here in the United States that we believe provides financial support to Hamas and to their terrorist operations, in this particular case in Palestine. And we've made it clear that this is a war against terror, and we've defined it as such.

Q One of the interesting things here is that Arafat seems to have painted himself into a corner. He's now caught between the Israelis, and many Palestinians, who see anyone fighting against Israel as a champion of their cause. What do you see as the benefits for Arafat doing what we would like him to do? Obviously, it's going to be tough for him. There are political risks, there are personal risks.

What are the incentives for him to really crack down on terrorists, once and for all?

THE VICE PRESIDENT: I think you've got to go back and look at history, and remember how we got to the point where we had ongoing negotiations between Arafat and the Israelis. Arafat and the PLO were run out of Jordan, they were run out of Lebanon. They were living in Tunisia; Arafat was himself. He returned to Israel after there had been an agreement that he would renounce violence, recognize the right of Israel to exist and enter into negotiations along the lines of the Resolutions 242 and 338, and trading land for peace.

And that was what got us to the point we're in now. Now, as he tolerates terrorism as -- I don't want to say he encourages it, but he certainly has not controlled it from Palestinian territory -- he's sort of destroyed, if you will, the framework of the understanding under which those negotiations were going to move forward.

The thing that he puts at risk here, I think, is his own continued operation with respect to the effort to try to establish a Palestinian homeland. The people of Palestine are ultimately the ones who suffer most here. Because as long as the violence continues in terms of not just military conflict, but aggressive suicide bomber attacks against civilians, against women and children, against discos and pizza parlors and shopping malls, there isn't any way, in my opinion, that we're going to see a resumption of true progress towards peace in the Middle East.

He has to control those attacks from Palestinian territory, or I'm afraid we'll see the continued kind of problem that we've got at present.

Q If he takes that path, though, what is at the end of it for him? I mean, he obviously has to make a tough decision.

THE VICE PRESIDENT: Well, if he's successful -- he does have to make a tough decision, but I think there's only one decision he can make. If he's not able to control terrorist attacks coming from his territory against Israel, then he's not a reliable partner. He's not someone you can enter into an agreement with, with respect to a permanent arrangement for peace. No one is going to trust him with respect to being the presiding authority, if you will, with respect to a Palestinian homeland. We're not going to get any farther down the road.

And the unfortunate thing, of course, if that happens is that the losers will be especially the Palestinians. I think they've got more at stake here than anybody else.

Q One domestic question before I let you go. The war on terrorism is expensive. We're now talking about being in deficits for two, three, maybe more years. Do some of the domestic priorities of the administration, some of the domestic priorities of the country, now have to take a back seat for a while?

THE VICE PRESIDENT: I don't think so. We have continued to make progress on tax policy; of course, we got that done before the September attack. We're back now trying to get a stimulus package through to give the economy a shot coming into next year. But we're very close to having the education bill wrapped up. That's been a very important priority for us and we're making significant progress there.

So I don't believe that there is any reason why we have to suspend, if you will, activity on domestic issues. I know the President feels strongly about wanting to move forward in that area. Part of the struggle against terrorism, if you will, is not to let them throw us off stride, not to react in a way that allows them to destroy our way of life, or detract us from other important responsibilities as well, too.

Q You know, there are a lot of professional second-guessers, people who said we couldn't possibly have a war during Ramadan, that we couldn't possibly win before the winter, that General Franks didn't know what he was doing. Are you occasionally tempted to say, I told you so?

THE VICE PRESIDENT: I have said that a few times. I have, indeed. (Laughter.)

Q One other point. One of the most interesting things out of this is the sudden popularity of Donald Rumsfeld. And I understand that some members of the administration have been teasing him a bit and suggesting that he has become a "babe magnet" for the 70-year-old set. (Laughter.)

THE VICE PRESIDENT: There is a lot of good-natured ribbing that Don has to suffer these days, but he seems to enjoy it. He's thrived on it. The latest report I heard was a rumor that his afternoon Pentagon briefing is taking audience share away from the afternoon soap operas. So I don't know who is watching him out there, but it appears to be a fairly significant group.